There are no longer any legal obstacles to the takeover of Warner Bros. by Paramount

After several months of battle over competition rules, Paramount reached an agreement with the twelve American states which sought to block the transaction.

This time, the road seems clear.

Paramount Skydance has reached an agreement with the twelve US state attorneys general who filed antitrust proceedings to prevent its takeover of Warner Bros. Discovery.

A week before Paramount begins paying a late fee of up to $7 million per day, the agreement removes the main legal obstacle to the transaction, which is estimated to be worth around $110 billion.

And this is not the only file that has just been unblocked. The Writers Guild of America, which also filed a complaint in July to try to block the merger, has in turn reached an agreement with Paramount and abandoned its procedure. The Guild nevertheless maintains that it continues to believe that the operation could harm screenwriters and the industry.

The details of the agreement concluded with the States are now beginning to be known. Paramount undertakes in particular to maintain its activities in California and not to sell the Paramount and Warner Bros. studios. located in the State for at least five years.

The group will also have to invest an additional 300 million dollars per year in film production in the United States, or 1.5 billion over five years, and release at least 30 films per year in cinemas.

The agreement also provides guarantees regarding the editorial independence of CNN and CBS News, with the creation of structures responsible for overseeing these issues. On the other hand, Paramount was not forced to make significant asset sales to obtain the green light from the States.

The standoff was particularly tense in recent weeks. A coalition led by California Attorney General Rob Bonta obtained an order in July temporarily preventing the finalization of the transaction, believing that it risked reducing competition in theaters and cable. Paramount, for its part, defended an operation that it considered favorable to competition and likely to increase its production capacity against Netflix and Amazon.

Paramount had already obtained authorizations from several competition authorities, including the American Department of Justice and the European Commission, and explained in early September that all other closing conditions were met. The appeals of the States and the WGA then constituted the last two obstacles to completing the operation.

The takeover of Warner Bros. Discovery by Paramount is therefore not yet officially finalized, but the agreement with the States and the settlement of the WGA appeal now open the way for it. We still have to wait for the formal closing of this historic operation, which will bring together Paramount Pictures, Warner Bros., HBO Max, Paramount+ and CNN under the same group.